South Korean thermal coal imports in July ramped up by 2.7mn t or 50pc from June, recovering from an 18-year low in the first half of 2025, driven by increasing power demand during a hotter summer across Asia.
Thermal coal imports also rose by 605,000t or 8pc on the year last month, despite South Korea showing a preference for renewables since President Lee Jae-Myung took office in June.
Russia was South Korea's largest supplier in July, shipping nearly 2.7mn t, up by 50pc on the year. Russian coal was favoured by South Korean buyers mainly because of its price competitiveness, sources said.
Australian volumes also rose by 71.2pc on the year to 2.2mn t in July, after South Korea's state-owned utilities awarded multiple Australian cargoes in recent months.
Indonesia was the next-largest thermal coal supplier to South Korea last month with 2.1mn t, up by 2.1pc on the year. The relatively short freight route from Indonesia to South Korea offers utilities an advantage in managing inventories, sources said.
S Korea hits 18-year low in Jan-Jun
July imports improved from a low base in the first half of this year, during which receipts fell by 20pc on the year to 33.1mn t, the lowest first-half volumes since 2007, according to customs data.
Lower imports were driven by shifts in South Korea's power mix as a wave of new solar capacity, authorised and built under the previous Moon Jae-in administration, came on line at the start of this year, according to sources.
South Korean buyers mainly bought thermal coal from Indonesia and Australia in January-June. Volumes from both origins fell by 12.3pc and 27.5pc on the year, respectively, to 10.5mn t and 7.7mn t over this period, customs data show.
But thermal coal imports from the US — from which South Korean buyers typically source low-grade supply — improved slightly by 1.2pc on the year in January-June.
Meanwhile, South Korea imported 5.8mn t of Russian coal in January-June, down by 19.6pc on the year to its lowest take from the origin since the same period of 2012. Russian coal accounted for 17.7pc of the country's total first-half volumes.
Although Russia was South Korea's largest supplier in July, demand for coal from the origin is expected to ease over the coming months, given South Korea's state-owned utilities are understood to be under instruction to cap Russian coal purchases at 10pc and that they have already purchased substantial volumes of Russian coal in the first half of this year.
Receipts from Colombia and South Africa in January-June dropped by 10pc and 47.4pc on the year, respectively, to 3mn t and 2mn t.
The significant drop in South African coal imports could have been the result of elevated freight costs and other mid-CV alternatives such as Australia and Indonesia, which were competitively-priced earlier this year, market participants said.
Thermal coal imports from Canada — which exports mid-grade coal to South Korea — also fell by 13.4pc on the year to 1.7mn t over the same period, customs data show.
Increased solar capacity limits coal burn
Stronger renewables generation in January-June eroded coal's share of South Korea's power generation mix as increased solar capacity, approved and initiated under the previous administration, came on line at the beginning of this year.
South Korean coal-fired output averaged 15.5GW in January-June, falling by 15.2pc on the year, while the country's solar output averaged 4.54GW over the same period, up by 16.4pc on the year, according to state-controlled power operator Kepco.
Increased solar generation also shifted South Korea's daytime thermal generation mix in favour of gas-fired generation, given gas-fired plants are more flexible in adjusting output compared with coal, market participants said.
Power generation from nuclear, gas and renewables rose by 8.8pc, 2.9pc and 8pc, respectively, in January-June, Kepco data show.
20082025043852.jpg)
